Demanding Answers or Court Time for the Courthouse

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It might be time to take the Courthouse to court. At least that’s how some felt at the latest meeting regarding the long-abandoned Rockaway Courthouse on Beach 90th Street. On Tuesday, November 27, Community Board 14’s Economic Development Committee (CB14 EDC) gathered at the Knights of Columbus in hopes of hearing some new developments with the courthouse owned by Uri Kaufman of The Harmony Group. Yet with Kaufman being a no-show, many left the meeting disappointed and suggesting that the NYC Economic Development Corporation considers taking back the courthouse to give it to new hands.

At Tuesday’s meeting, CB14 EDC Committee members were expecting to hear news on progress on the courthouse, which has seen minimal action since NYCEDC selected The Harmony Group as the developer in April 2013. In March 2015, Kaufman was awarded the property at a price tag of $50,000 in part because of a promise that The Harmony Group would invest $10 million into transforming it into a medical center. Things were looking good as Dr. Mark Gelwan and the Rockaway’s ASC Development group were expected to become tenants of the future medical facility, but by late 2014, Rockaway’s ASC Development had a falling out with The Harmony Group and instead opted to develop a brand new medical facility at Beach 105th Street, which is now nearing completion. As if losing his tenants and now having the competition of another medical facility nearby weren't enough, a court ordered The Harmony Group to pay $300,000 for a breach of contract to Gelwan and other defendants in a lawsuit in November 2017. Yet Kaufman remained optimistic.

In September 2017, Kaufman came to a Rockaway Beach Civic Association (RBCA) meeting to outline his plans. However it lacked many details, such as what specific medical uses the building would be used for. Kaufman was asked to return when he had more concrete plans. In a follow-up meeting in December 2017, NYCEDC representative Eleni Bourinaris, provided an update to ease some concerns that Kaufman wouldn’t be able to use the building for anything other than medical use, as he had originally promised, instead of turning it into something else that the community didn’t want.

Soon after, asbestos removal began, but not much else. With minimal work taking place and the need for another medical facility no longer there, the RBCA once again brought up the issue in May 2018 and went as far as to say that the NYCEDC should consider taking the property back from Kaufman and opening it up to new proposals. But Kaufman insisted he was making progress.

This past summer, The Rockaway Times reached out to Kaufman who said, “We're literally inches away. We have a tentative closing date with the bank for the construction loan for July 31.”

Yet there has still been limited action occurring at the building that once bore a sign saying, “Coming in 2017.” So CB14 called for a meeting in hopes of receiving updates. However, after Kaufman didn’t show up and NYCEDC’s Susan Goldfinger, the Senior Vice President for Real Estate Transaction Services, showed up in place of Bourinaris to provide no substantial update on Tuesday, committee members left, calling the meeting a “waste of time.”

Goldfinger began by presenting some of the updates. She outlined a timeline including building permit approval in summer 2017, the start of asbestos abatement in winter 2017, which was completed in spring 2018, the completion of environmental testing in fall 2018 and the start of internal demolition in the fall of 2018, which is 80 percent complete.

With so little new information, and no news of Kaufman having any tenants locked in, fears once again began to swirl about the property eventually being used for another use, or an unwanted “medical” use such as a methadone or abortion clinic. And once again, talk began of having the project stopped and beginning the process of reverting the property back to the NYCEDC and for it to be open to another developer.

CB14 member and Rockaway Civic Association President Noreen Ellis expressed concerns about Kaufman’s financial situation and the lack of tenants. “When we first heard about him, his finances were a little concerning to me. He’s debt-financing projects, so he needs to show financers that he has anchor tenants for the project. Two of his other projects in Albany had financial difficulties, so I believe a lot of these delays may have been due to a lack of financing and a lack of tenancy and it’s a vicious cycle. There’s a concern that at the 7th inning, he’s going to try to change something and the community won’t be part of the dialogue. You already have a larger medical facility going up on Beach 105th and I’m not sure he’s going to have the tenant base for this. We’re afraid there’s going to be a bait and switch,” Ellis said, to which Goldfinger replied that Kaufman is limited to only certain medical uses.

Frustration led CB14 member and RBCA president John Cori to suggest that the property be taken back and used for something else altogether, as the RBCA had requested back in the spring.

“At what point does a local civic or community board say to you that we want to take that property back, and at what point do you listen? We already sent a letter to you seven months ago asking for that to happen,” Cori said. The EDC’s Goldfinger defended Kaufman, saying, “We feel that even if it is moving slowly, he’s acting in good faith. He’s made investments and it may not seem to the community that it's sufficient enough, but at this point, we are encouraged by that and want to give him the opportunity to see this through.” Cori retorted, “We had promises made in this room that work would commence on January 1 of this year,” to which Goldfinger replied, “Work did commence. He did asbestos remediation, which is required.”

Cori pressed on: “Let’s get him here and make a timeline that if he goes beyond, we want to start the reverter clause. This is getting ridiculous,” Cori said. “I’m disgusted and shocked that this has been going on so long. He’s literally dumping garbage out the window, making it seem like he’s made progress, but he doesn’t even have real tenants. There’s a lot that needs to be done here and we were told by CB14 that if he didn’t meet his deadline, the building could be taken back by EDC.” Goldfinger argued against this idea saying, “to take it back means taking it to court, which is always an option. But the EDC practice is to give opportunities for developers to fix their defaults and in this case it was agreed upon by the EDC and the community to give him more time. Going forward, if he’s in default, we have an opportunity to revisit getting the building back and opening it up to other uses, but I’ve been involved in those situations and it takes a good five to seven years to bring that to the table.”

Cori replied, “This has been an eyesore for the community for many years and it’s getting worse. It’s not maintained and it’s unfair to this community. We want the developer here. We want Uri to answer questions directly and have him on record. We want him to explain what the hell is going on.”

A follow up meeting with Kaufman and the CB14 Economic Development Committee is expected.